The Chinese “Lay Flat” Attitude: No Mortgage, No Marriage, No Kids

Lay flat image from a Chinese forum. I’m laying flat, you come and do what you wish.
Lay flat image from a Chinese forum. I’m laying flat, you come and do what you wish.
This article “Why the trade war will usher in a long, drawn-out bear market, with stocks, bonds, credit and property all at risk” by Andy Xie took some time to think about.
Shakeout of Speculators
Historically low interest rates have allowed people to take out debt cheaply. These funds have been sued to purchase risky assets. This has led to speculation. Now that interest rates are rising this will force speculators to use more expensive funds to service their debt. Over leveraged companies will not survive.
Any cursory examination of Beijing’s skyline in 2008-2009 will reveal that commercial buildings such as general office, retail space and hotels have been sprouting up like weeds. As the Olympics wound down and the Global Financial Crisis deepened, it was clear to all that the vacancy rate for these mamoth buildings is very high. Beijing is oversupplied with commercial real estate by an estimated 14 years of optimistic growth. One needs to wonder who financed these buildings and how will they recoup their investment. It seems like the heard mentality has prevailed.